Economic impact of climate change for major cities extra big

Overheated cities face climate change costs at least twice as big as the rest of the world because of the ‘urban heat island’ effect, new research in Nature Climate Change shows.

06/01/2017 | 5:00 PM

The study by IVM researchers Francisco Estrada, Wouter Botzen and Richard Tol of all the world’s major cities is the first to quantify the potentially devastating combined impact of global and local climate change on urban economies. The analysis of 1,692 cities, published on 29 May in the journal Nature Climate Change, shows that the total economic costs of climate change for cities this century could be 2.6 times higher when heat island effects are taken into account than when they are not.

For the worst-off city, losses could reach 10.9 per cent of GDP by the end of the century, compared with a global average of 5.6 per cent. The urban heat island occurs when natural surfaces, such as vegetation and water, are replaced by heat-trapping concrete and asphalt, and exacerbated by heat from cars, air-conditioners and so on. This effect is expected to add a further two degrees to global warming estimates for the most populated cities by 2050. Higher temperatures damage the economy in a number of ways. More energy is used for cooling, air is more polluted, water quality decreases and workers are less productive, to name a few.

Importance of local interventions
The authors of the study – from the University of Sussex in the UK, Universidad Nacional Autónoma de México, Vrije Universiteit Amsterdam and Utrecht University – say their new research is significant because so much emphasis is placed on tackling global climate change, while they show that local interventions are as, if not more, important. Moreover, the study shows that city-level adaptation strategies to limit local warming have important economic net benefits for almost all cities around the world.

Although cities cover only around one per cent of the Earth’s surface, they produce about 80 per cent of Gross World Product, consume about 78 per cent of the world’s energy and are home to over half of the world’s population. Measures that could limit the high economic and health costs of rising urban temperatures are therefore a major priority for policy makers.

Cool pavements and roofs
The research team carried out a cost-benefit analysis of different local policies for combating the urban heat island, such as cool pavements – designed to reflect more sunlight and absorb less heat – cool and green roofs, and expanding vegetation in cities.

The cheapest measure, according to this modelling, is a moderate-scale installation of cool pavements and roofs. Changing 20 per cent of a city’s roofs and half of its pavements to ‘cool’ forms could save up to 12 times what they cost to install and maintain, and reduce air temperatures by about 0.8 degrees.

Doing this on a larger scale would produce even bigger benefits but the vastly increased costs mean that the cost-benefit ratio is smaller. Policies that expand vegetation in cities, like green roofs and parks, can also contribute to reducing urban heat and have important side benefits, like for recreation and amenity values.

Global and local measures together
The research has important implications for future climate policy decisions. The positive impacts of such local interventions are amplified when global efforts are also having an effect, the study shows.

Professor Tol: “It is clear that we have until now underestimated the dramatic impact that local policies could make in reducing urban warming. However, this doesn’t have to be an either/or scenario. In fact, the largest benefits for reducing the impacts of climate change are attained when both global and local measures are implemented together. And even when global efforts fail, we show that local policies can still have a positive impact, making them at least a useful insurance for bad climate outcomes on the international stage.”

Professor Botzen: “Some large cities are already pro-actively planning for reducing the risks posed by climate change, and our results provide an economic rationale for such climate adaptation plans. Local adaptation measures bring more immediate economic benefits and reduce reliance of cities on a stringent international agreement to solve climate change, which seems unlikely to be implemented in the near future.”

Dr. Estrada: “Most of the world’s population will live in cities during this century and will be increasingly exposed to severe impacts from global and local climate change. Urban warming reduction measures represent key elements for managing climate risks at the city level and an opportunity to improve the quality of life of present and future city dwellers”.